Thursday, September 14, 2006

Charity vs. Profit: The nation's non-profit hospitals are in the hot seat. The U.S. Senate is not happy with their business practices:

Nonprofit hospitals may charge poor, uninsured patients more than insured patients for the same services. "Nonprofit doesn't necessarily mean pro-poor patient," he said.

It's almost impossible to determine whether hospitals' charity care and community benefits equal their tax breaks. They are not required to report information about those activities to the Internal Revenue Service.

Several for-profit hospitals are providing as much, if not more, charity care than some nonprofit hospitals.

Some nonprofit hospital executives "enjoy the best hotels and great meals, all subsidized by the taxpayer." Some hospitals also foot the bill for executive country club dues.

This Corporation generally exists for the purpose of benefiting society, such as charities, churches or schools. The net income of a Non-Profit Corporation must be used to further the goals of the corporation, not to enrich individual members, directors or officers.

Lots of charities pay their CEOs handsomely, too. Paying them handsomely presumably attracts the best candidates, which "furthers the goals of the coporation." They just can't reward them with profit-sharing incentives and stock options. However, Senator Grassley has a point. Over the past two decades hospitals - even non-profit hospitals- have been transforming themselves into posh resorts. The Cleveland Clinic owns and operates a swank hotel on its campus with some of the best dining in the area. (The last time I went to a conference there they had a live string quartet providing background music.) The two largest non-profit hospitals in my town are busy building what amount to health spas in the suburbs to attract customers patients who have better a different income demographic than the patients who live near the hospitals themselves.

And what to make of perqs like these? Non-profit doesn't mean free, but it isn't unreasonable to ask them to use some restraint .

In my community one local nonprofit just completed a $80M renovation and still showed a $15M profit, sorry income. There use to be a program where you were covered by the hospital for all co-pays. This has gone by the way side as now all the offices in the hospital are independent.

The state insurance agency is looking into a per head fee given to agents signing up new people for their plan. A plan that does not cover any out of area cost. Go to Florida, pay out of pocket for all of your medical needs.

I don't really care if a doctor who's making several hundred thousand, spends an extra 2-5k to take his wife along with him on a trip. If the hospital thinks that funding an extra ticket so he can take his wife along is worth it, then let them do so. This way the doctors aren't worrying about having to call home or having a pissed spouse at home to deal with. It's hard enough for spouses to put up with the long hours. No one would have blinked if it'd been an extra ticket for an assistant or secretary. The article seems just silly to me.

One of the difficulties that physicians and hospitals face when dealing with how to charge the uninsured is the cold hard fact that federal law prohibits us from charging them differently. If I, for example, see a patient with no insurance, I am not allowed to charge them differently than my standard rate or CMS (the administrative arm of Medicare) can audit my books and demand that I give back the same percentage to the government that I discounted that one patient. So can insurers. It's a no win situation. As a result, the patients get a bill, and we then go throught the motions of trying to collect until we are legally allowed to write it off.